AUM and AUA * EFG INTERNATIONAL CONSOLIDATED FINANCIAL HIGHLIGHTS. in CHF billion. in CHF million June 30, 2006

Transcription

1 Half-Year Report 2006

2 AUM and AUA * in CHF billion 66.3 EFG INTERNATIONAL CONSOLIDATED FINANCIAL HIGHLIGHTS in CHF million June 30, Income Statement Operating Income Profit before Tax Net Profit Net Profit attributable to ordinary shareholders 88.4 Cost/Income Ratio (%) Balance Sheet Total Assets 12, H H 2006 Shareholders Equity 2,142.7 Client Relationship Officers (CROs) * 356 Market Capitalisation Share Price (CHF) Market Capitalisation 4, BIS Capital Total BIS Capital 1, Total BIS Capital Ratio (%) 40.7% 226 Ratings Long-term Outlook Moody s A2 stable Fitch A positive 90 Personnel Total number of CROs 323 Total number of employees 1, H H 2006 Listing Listing at the SWX Swiss Exchange, Switzerland; Net Profit ISIN: CH in CHF million Ticker Symbols Reuters EFGN.S Bloomberg EFGN SW * Legend of AUM, AUA and CROs H H 2006 Assets under Management (AUM) or Number of CROs Swiss GAAP IFRS proforma including announced acquisitions Assets under Administration (AUA)

3 1 SHAREHOLDERS LETTER 3 FINANCIAL REVIEW 7 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT 14 CONDENSED CONSOLIDATED INTERIM BALANCE SHEET 15 CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT 16 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGE IN EQUITY 17 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 18

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5 3 Dear Shareholders, dear Clients When we reported our progress at the end of 2005, EFG International had reached a watershed in its development, having celebrated a decade of achievement by successfully going public in October Across our business, the prevailing mood was one of excitement, commitment, and optimism for the future. We are pleased to report that, in the first half of 2006, we have been able to harness this collective energy to deliver strong performance and prac tical achievements. In financial terms, we continued to take meaningful strides forward in the six months to end-june 2006*: A net profit of CHF million, up 101 % from 1H 2005 and 42 %* from 2H Net profit attributable to ordinary shareholders was CHF 88.4 million, up 191 % from 1H 2005 and 66 % from 2H Operating income of CHF million, up 105 % from 1H 2005 and 46 % from 2H Clients Assets under Management were CHF 53.8 billion as of June 30, 2006 up 110 % from 1H 2005 and 14 % from 2H For the first half year 2006, net new assets and the increase in clients loans were CHF 5.3 billion (loans: CHF 0.7 billion). The increase in clients Assets under Management due to acquisitions was CHF 2.1 billion, while market effects (essentially dollar effects [CHF 1.7 billion] and market movements and other currency effects [CHF 0.8 billion]) led to a decrease of CHF 0.9 billion. Taking into account the effect of the recently announced acquisitions, clients Assets under Management were CHF 59.6 billion, up 26 % from 2H A notable aspect of this performance was the contribution made by our operations around the world, underlining EFG International s credentials. Results were particularly strong in Switzerland, the UK, Sweden, Asia and the Americas. The growth of EFG International is founded on a platform of achievement in five key areas. We continued to develop all of these during the first half of 2006: Organic growth. In an industry frequently characterised by front-line churn, Client Relationship Officers (CROs) of the highest calibre continue to choose EFG International as their long-term professional home. In the six months to end- June 2006, we increased our CROs to 323, up 55. Over the last 12 months, we have increased the number of CROs by 143, up some 80 % year-on-year. In addition to these figures are a further 33 CROs, from the announced acquisitions (see below) of Harris Allday and Banque Monégasque de Gestion which will bring us to a total of 356 CROs. Growth through acquisitions. We announced the acquisition of two businesses in the six months to end-june. In February, we enhanced our hedge fund capabilities

6 4 with the acquisition of Bermuda-based fund of hedge funds manager C. M. Advisors Limited (CMA). In May, we agreed to acquire Banque Monégasque de Gestion, Monaco from UniCredit Private Banking S.p.A. (a subsidiary of UniCredito Italiano S.p.A.). This acquisition will increase our footprint in Southern Europe, provide a boost to clients Assets under Management of circa CHF 1.3 billion, and, when combined with our existing operations, will transform EFG International into a significant force in the Monaco private banking market. In July, we reached an agreement to acquire Birmingham-based private client stockbroker Harris Allday, extending our reach in the UK regions (with offices in Birmingham, Bridgnorth, Banbury and Worcester) and adding over CHF 4.5 billion of clients Assets under Management. This transaction was closed on August 18, We recognise that once an acquisition is completed, the real work starts. EFG International has made strong progress, both in terms of integration and ongoing business development in relation to all of the acquisitions undertaken last year.* Expanding our geographical presence. We continued our policy of attaining greater proximity to our clients, opening banks in Luxembourg and the Bahamas the latter following on from our acquisition of the Bahamas-based activities of Banco Sabadell as well as starting a branch in Dubai and opening a representative office in Jakarta, Indonesia. We have applications pending to open offices in Manila, Philippines; and Bangkok, Thailand. By way of extending our trust capabilities in Asia, we recently opened a trust company in Hong Kong. EFG International continues to develop as a truly international organisation, operating in 40 locations in 26 countries with 13 booking centres. Building our organisational infrastructure. In order to improve our communication with our investors and the markets, we appointed key individuals to run investor relations and communications. We expanded our technological capabilities, upgrading our IT system, and working on the integration of recently acquired businesses onto the group platform. Our legal team was enhanced with the appointment in March of Fred Link as Group General Counsel and Group Secretary. We further strengthened our central financial control team, with a number of senior hires. Building product strength. As mentioned, the acquisition of C. M. Advisors Limited with CHF 2.1 billion of clients Assets under Management and rigorous research capabilities regarding over 2,500 hedge funds extended our knowledge and expertise in the hedge fund arena. This enabled us to launch CMA Global Hedge PCC Ltd, a London Stock Exchange listed company investing in hedge funds. The IPO of CMA Global Hedge PCC Ltd, in July 2006 raised US$ 408 million. The funds raised, together with additional borrowing, are managed by CMA and will increase our clients Assets under Management by approximately CHF 1 billion. EFG International has increased its stock exchange memberships, which now encompass Switzerland (SWX), Virt-X (pan-european), the UK (LSE) and Sweden (OMX), the latter two in We also recently extended the benefits of

7 5 continuous electronic access to approximately 20 equity markets, by way of an innovative service designed for our professional and institutional clients. We are pleased to note that our progress has been recognised by the ratings agencies. Fitch assigned an inaugural rating for EFG International of short-term F1 and long-term A with positive outlook, while upgrading the long-term rating for EFG Bank (EFG International s Swiss private banking subsidiary) to A with positive outlook (up from A- with positive outlook ). Moody s assigned an inaugural issuer rating for EFG International of A2 with stable outlook, while confirming the long-term rating for EFG Bank of A2 with stable outlook. The last few months have been characterised by volatile markets. However, EFG International has a track record of growth during turbulent as well as benign market conditions. Our continual challenge is to craft solutions for our clients across all phases of the business cycle, with the advice and guidance of CROs playing the central role. Looking ahead, we see no shortage of oppor - tunities to extend our innovative business model to new markets, and we are currently considering market entry strategies in Southern Europe, India, Canada and the Carribean. In addition, we are currently evaluating a number of acquisition opportunities involving private banking- and asset management-businesses in onshore Europe (including Switzerland), the Americas and the Middle East. Going forward, we remain confident that the strong potential of EFG International combined with application and the means to realise it will be reflected in a positive evolution of shareholder value from the present level. This confidence was amply demonstrated when, upon the expiry of the first phase of the EFG International share lock-up following our IPO, none of the members of the Executive Committee took the opportunity to sell shares. EFG International is an innovative business in robust financial health, with no shortage of future growth prospects. However, the business would not be where it is nor would it have any prospect of undertaking the exciting journey that lies ahead without the dedication of its CROs and operations teams around the world, the support of its shareholders, and the loyalty of its clients. Jean Pierre Cuoni Chairman Lawrence D. Howell Chief Executive Officer * Half year financials now include last year's acquisitions, i.e. EFG Private Bank Ltd, London, EFG Eurofinancière d Investissements SAM, Monaco, Chiltern Wealth Management, London, Bank von Ernst (Liechtenstein) AG, Vaduz, DLFA Dresdner Lateinamerika Financial Advisors LLC, Miami, since February 2006 Banco Sabadell s Private Banking business in the Bahamas and C. M. Advisors Limited, Bermuda.

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9 7 FINANCIAL REVIEW For the first half of the financial year 2006, consolidated net profit increased by 101% to CHF million as compared to the first half of the financial year Net profit attributable to ordinary shareholders amounted to CHF 88.4 million, representing and increase of 191%. For the same period, consolidated operating income rose by 105 % to CHF million. FACTORS AFFECTING RESULTS OF OPERATIONS For the first half of the financial year 2006, EFG International reported a net profit of CHF million, an increase of 101 % compared to the same period last year, while operating income increased by 105 % to CHF million. Consolidated financial results for the first half of 2006 reflect the full impact of the five acquisitions EFG International closed in The financial results of the Bahamian based private banking business of Banco Sabadell and of C. M. Advisors Limited (CMA), Bermuda, were consolidated from February 2006 onwards. Operating income on a comparable basis for 1H 2006 versus 1H 2005 prior to the impact of the 5 acquisitions made in late 2005, has grown by approximately 50% from CHF million to CHF million. This excludes the pro-forma impact of 2005 acquisitions of approximately CHF 77 million of operating income that the 5 acquisitions generated in 2H 2005 on a sustainable running basis. The number of Client Relationship Officers (CROs) increased by 20 % to 323 during the first half of 2006, as a result of continued hiring. EFG International continued to make acquisitions in the first half of 2006, with two transactions announced during the first six months and one announced in early July: CMA in Bermuda, Banque Monégasque de Gestion in Monaco and Harris Allday in Birmingham, UK. Through the acquisition of CMA, EFG International increased its clients Assets under Management by approximately CHF 2.1 billion. The announced acquisitions of Banque Monégasque de Gestion and Harris Allday will together add approximately CHF 5.8 billion clients Assets under Management. In addition to ongoing hiring of CROs, the continuing high level of M&A activity in the first half of 2006 industry-wide, but also in the private banking and asset management area, supports EFG International s confidence that consolidation will continue with resulting acquisition opportunities for EFG International.

10 8 CONSOLIDATED CLIENTS ASSETS UNDER MANAGEMENT AND ASSETS UNDER ADMINISTRATION Clients Assets under Management increased by 110 % year-on-year to CHF 53.8 billion as of June 30, 2006, up from CHF 25.6 billion as of June 30, 2005 and up by approximately 14 % since the end of fiscal year Excluding EFG International shares, which do not form part of the current % free-float of EFG International shares at the SWX Swiss Exchange, clients Assets under Management amounted to CHF 50.3 billion per end of June Clients Assets under Management by Asset Class in CHF billion, except % 100 % 6% EFG International Locked-up Shares EFG Funds 16% Third Party Funds 11% Equities 13% Structured Notes 3% 14% 11% 18% 12% 12% 30% % 14% 27% Loans and Other Bonds Deposits and Fiduciary Deposits 1H H 2006 CONSOLIDATED FINANCIALS Operating income Net interest income doubled year-on-year, rising to CHF 77.9 million as a result of the substantial increase in clients Assets under Management, the rise in interest rates and a small net impact related to excess capital. Net banking fee and commission income increased by 109 % to CHF million compared to the equivalent period in 2005, primarily as a result of the increase in average clients Assets under Management. Average clients Assets under Management for the first half of 2005 were CHF 23.8 billion, which compares to the time-weighted average for the current period of CHF 47.7 billion, excluding EFG International shares, which do not form part of the current % free-float of EFG International shares on the SWX Swiss Exchange.

11 9 Net trading income during this period was CHF 34.7 million versus CHF 17.6 million in the first half of 2005, therefore up by 97 %. Revenues reported in net trading income related mainly to trading on behalf of clients. As a result, total operating income for EFG International amounted to CHF million in the first half of 2006, an increase of 105 % compared to the first six months of Based on time-weighted average clients Assets under Management of CHF 47.7 billion, the annualised revenue margin increased to 1.21 % as compared to 1.18 % in the first half of last year. Operating expenses Operating expenses excluding amortisation and depreciation expenses increased by 105 % to CHF million, compared to CHF 80.3 million for the first six months of The cost-income ratio, calculated as the ratio of operating expenses before amortisation and depreciation to operating income expressed as a percentage, stood at 57.0 % for the first half of 2006, nearly unchanged from the 57.1 % reported at the end of the first half of The current cost-income ratio is due to faster then originally budgeted hiring of new CROs and influenced by the relatively high cost-income ratios of some of the recently acquired private banking businesses, whose integration synergies have been delayed pending completion of acquisitions in Monaco and London. Performance-based compensation components accounted for approximately 25 % of EFG International s total personnel expenses. The ratio of personnel expenses to operating income was 41 % and therefore remained at the same level as in the first half of As already highlighted in our Annual Report for the fiscal year 2005, expenses related to the EFG International Stock Option Plan started to have an impact on the company s personnel expenses from March 2006 onwards. During the first half of 2006, personnel expenses were impacted by CHF 600,000 as a result of the Stock Option Plan deemed expense. Other operating expenses, excluding depreciation and amortisation, increased by 104 % to CHF 46.3 million, mainly relating to the impact from the acquisitions announced during the second half of 2005 and to organic growth initiatives. These expenses accounted for 16 % of operating income and were thus at the same level as in the first half of Depreciation and amortisation expense of CHF 9.5 million include CHF 4.8 million IFRS-required expenses on intangibles related to acquisitions since July 1, 2005.

12 10 Operating Expenses (excluding Depreciation and Amortisation) as Percentage of Operating Income 100 % 100 % Operating Income 57 % 57 % Operating Expenses 1H H 2006 Consolidated net profit and consolidated net profit attributable to ordinary shareholders For the first half of 2006, EFG International reported a consolidated net profit of CHF million, an increase of 101 % compared to the CHF 50.1 million reported for the same period of last year. Net profit attributable to ordinary shareholders was CHF 88.4 million representing an increase of 191 % versus the CHF 30.4 million reported for the first half of Net Profit and Net Profit Attributable to Ordinary Shareholders in CHF million Net Profit Net Profit Attributable to Ordinary Shareholders H H 2006

13 11 Balance sheet EFG International s total balance sheet size as of June 30, 2006 increased by approximately 16 % to CHF 12.6 billion, compared to CHF 10.8 billion as of December 31, As compared to the total balance sheet size of CHF 5.4 billion as of June 30, 2005, the increase was approximately 131 %. Since the end of fiscal year 2005, loans to customers increased 16 % by CHF 737 million to CHF 5.3 billion at the end of June 30, 2006, which is in line with the overall growth of the business. As compared to loans to customers of CHF 2.2 billion as of June 30, 2005, the increase was approximately 144 %. On the liabilities side, the amount due to customers increased by CHF 1.4 billion, or approximately 18 %, to CHF 9.1 billion from CHF 7.7 billion at the end of fiscal year The increase is in line with the growth of clients Assets under Management. Equity base At the end of the first six months of 2006, shareholders equity stood at CHF 2.1 billion, up CHF 60.4 million from the level recorded at December 31, EFG International s BIS tier 1 capital ratio of 37 % according to the guidelines of the Bank for International Settlements (BIS) remains high in international comparison and continues to significantly exceed the legal requirements for banking groups in Switzerland and internationally. Consolidated risk weighted assets amounted to CHF 4.1 billion as of 30 June 2006, an increase of 20 % from December 31, Ratings Update During the first half of the financial year, both Moody s and Fitch Ratings assigned inaugural ratings to EFG International. On June 16, 2006, Fitch Ratings assigned a Long-Term Issuer Default Rating of A with Positive Outlook and a Short-Term Rating of F1. Shortly after, on July 6, 2006, Moody s assigned to EFG International a Long-term Rating of A2 with Stable Outlook. Rudy van den Steen Chief Financial Officer

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15 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006

16 14 CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2006 EFG INTERNATIONAL Half year ended Half year ended Half year ended 30 June December June 2005 Note CHF 000 CHF 000 CHF 000 Interest and discount income 206, ,903 72,513 Interest expense (128,229) (59,723) (33,773) Net interest income 4 77,860 52,180 38,740 Banking fee and commission income 206, ,097 94,444 Banking fee and commission expense (31,439) (16,874) (10,696) Net banking fee and commission income 5 175, ,223 83,748 Dividend income (43) 109 Net trading income 6 34,668 20,844 17,554 Gains less losses from other securities Other operating income / (expense) 60 (433) 478 Net other income 35,447 20,377 18,141 Operating income 288, , ,629 Operating expenses 7 (173,924) (116,684) (83,653) Impairment losses on loans and advances Profit before tax 114,644 81,096 56,976 Income tax expense 8 (13,948) (10,305) (6,873) Net profit for the period 100,696 70,791 50,103 CHF CHF CHF Basic earnings per ordinary share Diluted earnings per ordinary share The notes on pages 18 to 24 form an integral part of these condensed consolidated interim financial statements

17 CONDENSED CONSOLIDATED INTERIM BALANCE SHEET AT 30 JUNE EFG INTERNATIONAL 30 June December 2005 Note CHF 000 CHF 000 Assets Cash and balances with central banks 81,058 42,888 Treasury bills and other eligible bills 446, ,970 Due from other banks 4,064,578 3,744,459 Trading securities 8,483 7,836 Derivative financial instruments 141, ,881 Loans and advances to customers 5,281,707 4,544,459 Investment securities Held-to-maturity 535, ,435 Available-for-sale 1,265, ,706 Intangible assets 9 602, ,253 Property, plant and equipment 31,034 29,819 Other assets 99,813 69,755 Total assets 12,558,302 10,819,461 Liabilities Due to other banks 676, ,877 Derivative financial instruments 127, ,085 Due to customers 9,085,278 7,711,601 Debt securities in issue 149, ,355 Other borrowed funds 31,106 Other liabilities 376, ,085 Total liabilities 10,415,570 8,737,109 Equity Share capital 79,263 79,263 Share premium 1,337,889 1,338,270 Other reserves and retained earnings 725, ,819 Total shareholders equity 2,142,732 2,082,352 Total equity and liabilities 12,558,302 10,819,461 The notes on pages 18 to 24 form an integral part of these condensed consolidated interim financial statements

18 16 CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2006 EFG INTERNATIONAL Half year ended Half year ended 30 June June 2005 CHF 000 CHF 000 Net cash flows from operating activities 1,036, ,586 Net cash flows from investing activities (633,035) (243,929) Net cash flows from financing activities (71,423) 48,397 Net change in cash and cash equivalents 331, ,054 Cash and cash equivalents at beginning of period 4,217,803 1,848,282 Net change in cash and cash equivalents 331, ,054 Cash and cash equivalents 4,549,631 2,278,336 Cash and cash equivalents comprise the following balances with less than 90 days maturity: 30 June June 2005 CHF 000 CHF 000 Cash and balances with central banks 81,058 14,682 Treasury bills and other eligible bills 446, ,579 Due from other banks 4,013,138 1,891,724 Trading securities 8,483 14,351 Cash and cash equivalents 4,549,631 2,278,336 The notes on pages 18 to 24 form an integral part of these condensed consolidated interim financial statements

19 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGE IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE EFG INTERNATIONAL Attributable to equity holders of the Group Share Share Other Retained capital premium reserves earnings Total CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 Balance at 1 January , ,044 84,254 15, ,207 Preference dividend paid / payable (40,125) (40,125) Currency translation differences 1,704 1,704 Others ,002 13,150 (13,950) 87,361 Profit for the period 50,103 50,103 Balance at 30 June , ,046 58,983 51, ,250 Creation of EFG International and demerger effects (55,000) (653,507) 654,405 (898) (55,000) Issuances of shares 73,335 1,324,709 1,398,044 Effect of Business combinations exempted from IFRS3 (171,860) (171,860) Currency translation differences 3,168 3,168 Others 1,604 27,022 (559) (1,108) 26,959 Profit for the period 70,791 70,791 Balance at 31 December ,263 1,338, , ,682 2,082,352 Preference dividend paid / payable (24,652) (24,652) Currency translation differences (13,592) (13,592) Others (381) (1,691) (2,072) Profit for the period 100, ,696 Balance at 30 June ,263 1,337, , ,378 2,142,732 Please also see the 2005 Annual Report of EFG International for further details relating to the creation of EFG International in The notes on pages 18 to 24 form an integral part of these condensed consolidated interim financial statements

20 18 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 EFG INTERNATIONAL 1. GENERAL INFORMATION EFG International and its subsidiaries (hereinafter collectively referred to as the Group ) are a leading global private banking group, offering private banking and asset management services. The Group s parent company is EFG International, which is a limited liability company and is incorporated and domiciled in Switzerland. This condensed consolidated interim financial information was approved for issue on August 17, ACCOUNTING POLICIES AND VALUATION PRINCIPLES This interim report was produced in accordance with International Accounting Standard 34. The half-year accounts were prepared on the basis of the accounting policies and valuation principles valid as of 31 December ASSETS UNDER MANAGEMENT AND ASSETS UNDER ADMINISTRATION Character of client assets 30 June December June 2005 CHF million CHF million CHF million Deposits 9,084 7,712 3,945 Fiduciary deposits 4,244 4,470 3,895 Bonds 7,113 7,903 3,121 Structured notes 6,632 5,065 4,545 Equities 5,733 6,464 2,740 EFG funds 3, Third party funds 8,153 5,270 3,583 Loans 5,282 4,544 2,167 Other 1,061 1, EFG International shares held by EFG Bank European Financial Group and employees 3,517 3,656 Total Assets under Management 53,833 47,316 25,600 Total Assets under Administration 6,655 6,471 Total Assets under Management and under Administration 60,488 53,787 25,600 Assets under Management are client assets managed by the Group and comprise custodised securities, fiduciary placements, deposits, client loans, funds, mutual funds under management, third party custodised assets, third party funds administered by the Group and structured notes which are structured and managed by the Group. Assets under Administration are trust assets administered by the Group.

21 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE EFG INTERNATIONAL 4. NET INTEREST INCOME Interest and discount income Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Banks and customers 176, ,346 55,045 Trading securities 8 2 Other securities 29,245 11,555 17,468 Total interest and discount income 206, ,903 72,513 Interest expense Banks and customers (124,499) (55,803) (30,346) Debt securities in issue (2,846) (2,466) (2,480) Other borrowed funds (884) (1,454) (947) Total interest expense (128,229) (59,723) (33,773) Net interest income 77,860 52,180 38, NET BANKING FEE AND COMMISSION INCOME Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Commission income on lending activities 1,659 1, Commission income from securities and investment activities 165, ,455 84,904 Commission income from other services 28,495 8,190 8,896 Commission income from trust and company administration fees 10,778 2,090 Commission expenses (31,439) (16,874) (10,696) Net banking fee and commission income 175, ,223 83, NET TRADING INCOME Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Equities and Interest rate instruments 12,151 7,817 6,478 Foreign exchange 22,517 13,027 11,076 Net trading income 34,668 20,844 17,554

22 20 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 EFG INTERNATIONAL 7. OPERATING EXPENSES Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Staff costs (118,171) (80,956) (57,629) Professional services (6,555) (4,921) (3,506) Advertising and marketing (1,460) (2,394) (544) Administrative expenses (24,601) (15,054) (12,925) Operating lease rentals (8,125) (6,520) (3,951) Depreciation of property, plant and equipment (2,752) (2,032) (1,682) Amortisation of intangible assets (6,720) (2,148) (1,630) Other (5,540) (2,659) (1,786) Operating expenses (173,924) (116,684) (83,653) 8. INCOME TAX EXPENSE Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Current tax (8,109) (3,603) (3,250) Deferred tax (5,839) (6,702) (3,623) Total tax charge (13,948) (10,305) (6,873) 9. INTANGIBLE ASSETS 30 June December 2005 CHF 000 CHF 000 Computer software and licences 5,595 7,003 Intangible assets 96,308 31,888 Goodwill 501, ,362 Total intangible assets 602, ,253 C. M. Advisors Limited On 13 February 2006, the Group acquired 100 % of the issued share capital of C. M. Advisors Limited (CMA). Bermudabased CMA focuses on both managing fund of hedge funds and research of hedge funds. The transaction gave rise to goodwill of CHF million and to the recognition of Intangible assets of CHF 65.1 million. The Intangible assets are amortised over 4 to 14 year periods depending on their nature. The fair value of net assets acquired was not material. For the period ending 30 June 2006, the acquired company contributed a net profit of CHF 13.5 million before amortisation of intangible assets linked to the acquisition (CHF 10.2 million after amortisation). EFG Bank & Trust (Bahamas) Ltd In addition, the acquisition of the Bahamian based private banking business of Banco Sabadell was effective from February 2006.

23 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE EFG INTERNATIONAL 10. GEOGRAPHICAL SEGMENTS A geographical segment is engaged in providing products and services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. The group is organised in four geographical segments, which are Switzerland, Europe, Asia and Americas. The analysis below is based on the domicile of operations. For the six months ended 30 June 2006 Europe (excl. Switzerland Switzerland) Americas Asia Elimination Total CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 Segment income 135, ,308 30,133 26,054 (12,145) 288,568 Profit from operations 46,667 46,133 14,110 7, ,644 Profit before tax 114,644 Income tax expense (13,948) Group Profit after tax 100,696 Net profit 100,696 As at 30 June 2006: Segment assets 5,283,034 9,417, ,336 2,754,566 (5,423,268) 12,558,302 Segment liabilities 2,969,255 8,012, ,889 2,746,507 (3,569,672) 10,415,570 For the six months ended 31 December 2005 Europe (excl. Switzerland Switzerland) Americas Asia Elimination Total CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 Segment income 104,631 72,018 11,060 20,921 (10,850) 197,780 Profit from operations 25,000 51, ,313 81,096 Profit before tax 81,096 Income tax expense (10,305) Group Profit after tax 70,791 Net profit 70,791 As at 31 December 2005: Segment assets 5,207,215 8,608,262 29,207 2,383,066 (5,408,289) 10,819,461 Segment liabilities 2,999,649 7,657,098 17,850 2,375,661 (4,313,149) 8,737,109 For the six months ended 30 June 2005 Europe (excl. Switzerland Switzerland) Americas Asia Elimination Total CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 CHF 000 Segment income 83,414 34,087 6,753 18,651 (2,276) 140,629 Profit from operations 25,177 26, ,536 56,976 Profit before tax 56,976 Income tax expense (6,873) Group Profit after tax 50,103 Net profit 50,103

24 22 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 EFG INTERNATIONAL 11. CONTINGENT LIABILITIES AND COMMITMENTS Contingent liabilities: Guarantees 30 June December 2005 CHF 000 CHF 000 guarantees issued in favour of third parties 343, ,426 Commitments: Irrevocable commitments 551, , , , LEGAL PROCEEDINGS The Group s management believes that the outcomes of existing lawsuits is unlikely to have a significant impact on the Group s financial statements. 13. BASIC AND DILUTED EARNINGS PER ORDINARY SHARE Basic Earnings Per Ordinary Share Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Net profit for the period 100,696 70,791 50,103 Estimated, pro-forma accrued preference dividend 12,309 17,601 19,746 Net profit for the period attributable to ordinary shareholders 88,387 53,190 30,357 Weighted average number of ordinary shares Number of shares 146,670, ,204, ,164,000 Basic earnings per ordinary share CHF Basic earnings per ordinary share is calculated by dividing the net profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, excluding the average number of ordinary shares owned by the Group. For the purpose of the calculation of basic earnings per ordinary share, net profit for the period has been adjusted by an estimated, pro-forma accrued preference dividend. The latter has been computed by applying a preference dividend rate of 6.5 % from January 1, 2005 to November 10, 2005 and of % from November 10, 2005 to April 30, 2006 and of % from April 30, 2006 to June 30, The average number of EFG Fiduciary Certificates owned by the Group during the period were excluded from this calculation.

25 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE EFG INTERNATIONAL 13. BASIC AND DILUTED EARNINGS PER ORDINARY SHARE (CONTINUED) Diluted Earnings Per Ordinary Share Half year ended Half year ended Half year ended 30 June December June 2005 CHF 000 CHF 000 CHF 000 Net profit for the period 100,696 70,791 50,103 Estimated, pro-forma accrued preference dividend 12,309 17,601 19,746 Net profit for the period attributable to ordinary shareholders 88,387 53,190 30,357 Diluted-weighted average number of ordinary shares Number of shares 147,168, ,204, ,164,000 Diluted earnings per ordinary share CHF EFG International has issued a total of 733,350 options to purchase EFG International shares pursuant to its employee stock option plan on February 28, 2006 which have the effect of increasing the diluted-weighted average number of ordinary shares by 498, STOCK OPTION PLAN EFG International issued 733,350 options pursuant to the Employee Stock Option Plan with a grant date of February 28, These options have an exercise price of CHF 25.33, a vesting period of three years and may be exercised at any time during a period beginning five years from the grant date and ending seven years from the grant date. EFG International does not have any other stock options outstanding. The expense recorded in the income statement spreads the cost of the grant equally over the vesting period. Assumptions are made concerning the forfeiture rate which is adjusted during the vesting period so that at the end of the vesting period there is only a charge for vested amounts. Total expense related to the Employee Stock Option Plan in the income statement for the six month period ended June 30, 2006 was CHF 0.6 million. A deemed value of each option was estimated to be CHF 9.19 using a modified version of the Black Scholes Merton formula which takes into account expected dividend yield as well as other funding costs during the period between the end of the vesting period and the earliest exercise date. The significant inputs into the model were spot share price (CHF 36.25), expected volatility (21%), dividend yield (2%), other funding costs (5%), the expected life of the options (72 months) and the risk free rate (2.03%). Expected volatility was calculated using the 100 day average of volatility of other private banks listed in Switzerland, combined with a statistical analysis of implied market volatilities for options with similar expected lives. The expected life of the options has been assumed to be the mid-point of the exercise period. The risk free rate is the yield on Swiss treasury notes with an outstanding maturity of 72 months as of the grant date. Dividend yield has been calculated according to management s estimates of the long term dividend payments. Other funding costs represent adjustments made by market participants when pricing options that cannot be hedged or exercised and, pursuant to IFRS 2, may be applied only after the vesting period. The fair value of the options which is based on applying the other funding costs throughout the entire restricted period amounts to CHF 6.12.

26 24 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 EFG INTERNATIONAL 15. POST BALANCE SHEET EVENTS The Group announced on May 19, 2006 that it had reached an agreement to acquire Banque Monégasque de Gestion from UniCredit Private Banking S.p.A., a subsidiary of UniCredito Italiano S.p.A.. Banque Monégasque de Gestion is a Monaco-based private banking organisation which has operated with a full banking licence in the Principality of Monaco since Through the acquisition, the Group s clients Assets under Management will increase by approximately CHF 1.3 billion and the number of CROs by 6. The closing of the transaction is subject to certain conditions precedent, including regulatory approval and is expected by the 4th Quarter 2006 (previously communicated late summer 2006). The Group announced on July 10, 2006 that it had reached an agreement to acquire Harris Allday. Harris Allday is a Birmingham, United Kingdom, based private client stockbroker which traces its origin to 1834 and which has offices in Birmingham, Bridgnorth, Banbury and Worcester. Through the acquisition, the Group s clients Assets under Management will increase by approximately CHF 4.5 billion and the number of CROs by 27. The closing of the transaction is subject to regulatory approval and is expected by late summer. The Group announced on July 25, 2006 that the launch of CMA Global Hedge PCC Ltd ( CMA Global Hedge ) a London Stock Exchange listed company investing in hedge funds closed. CMA Global Hedge raised US$ 408 million, to be managed by CMA, the fund of hedge funds company acquired by EFG International in February CMA Global Hedge will aim to borrow an amount equal to approximately 100 per cent of its net asset value for portfolio investments. The bulk of funds raised by CMA Global Hedge and to be managed by CMA represents new money, not previously managed by the Group. 16. BOARD OF DIRECTORS The Board of Directors of EFG International is the following: Jean Pierre Cuoni, Chairman Emmanuel L. Bussetil Spiro J. Latsis Hugh Napier Matthews Périclès Petalas Hans Niederer

27 FOR MORE INFORMATION PLEASE CONTACT: HEAD OFFICE EFG International Bahnhofstrasse Zurich Phone Fax INVESTOR RELATIONS Phone Fax MEDIA RELATIONS Phone Fax DISCLAIMER FORWARD LOOKING STATEMENTS This Half-Year Report contains statements that are, or may be deemed to be, forward-looking statements. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Half-Year Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy and the industries in which we operate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Prospective investors should not place undue reliance on these forward-looking statements. Many factors may cause our results of operations, financial condition, liquidity, and the development of the industries in which we compete to differ materially from those expressed or implied by the forward-looking statements contained in this Half-Year Report. These factors include among others (i) the performance of investments; (ii) our ability to retain and recruit high quality CROs; (iii) governmental factors, including the costs of compliance with regulations and the impact of regulatory changes; (iv) our ability to implement our acquisition strategy; (v) the impact of fluctuations in global capital markets; (vi) the impact of currency exchange rate and interest rate fluctuations; and (vii) other risks, uncertainties and factors inherent in our business. EFG International is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

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